Economy in Northern Thailand: Worries about decline and consumer behavior!

Economy in Northern Thailand: Worries about decline and consumer behavior!

The economic situation in Chiang Mai is currently on the brink, as the latest reports from the Bank of Thailand show. On November 4, 2025, the bank's northern office led by Khun Nat Lumphikanon held a conference on the economic situation in the region in the third quarter of this year. The results are mixed and raise questions about the future development of the province.

The economic figures for the north of Thailand show a decline compared to the previous quarter. What is particularly noticeable is the session-related decline in consumption, which can be attributed to weak purchasing power and a lack of consumer trust. Farmers' incomes have suffered greatly, with falling prices for key crops such as rice causing noticeable hardship for farmers. Services in the tourism sector are also complaining about declining numbers, due to a significantly reduced flow of international and national tourists.

Tourism and labor market under pressure

The declining number of overnight stays in Chiang Mai is worrying. In particular, the decline in Chinese tourists has triggered a chain reaction that is affecting the entire economic infrastructure. Country data points out that Chiang Mai has had high visitor numbers in the past, which makes the current situation seem even more dramatic. The pandemic had already left its mark in recent years, and now the sector appears to be under renewed pressure.

Industrial production has also recorded a decline, especially for luxury goods. However, there are positives in the processed food and electronic components sector, where there is some growth. However, private investment in machinery and equipment has fallen, even though the construction sector has seen slight growth. This indicates a cautious attitude on the part of investors, who are awaiting further uncertainty about economic developments.

Economic forecasts and the role of inflation

The forecasts for the fourth quarter of 2025 show a bright spot: the economy could pick up again due to government stimulus and continued demand in certain sectors. In this context, the developments are: Inflation rate also of interest in Germany. While an inflation rate of 2.3 percent can be seen here in October 2025, in Thailand it is the falling price trend for fresh food that has a negative impact on inflation.

The labor market figures also show a complex situation: although a slight decline in the number of insured people was observed, there was a positive trend towards the end of the quarter. This mix of worry and hope will characterize the next few months in Chiang Mai and with a good hand in planning could be steered in a positive direction in jobs and investment.